Payment in fair terms – Law 2024, 2020
1. Purpose
To establish the duty for merchants or non-merchants which undertake mercantile acts, to pay their obligations within a period of maximum 60 calendar days, within the first year as of the enactment of the law, and a maximum of 45 calendar days, for subsequent years thereafter. Such periods will be calculated from the date of reception of the goods or the date in which the respective services were rendered.
2. Scope
In the case of commercial operations carried out within the framework of the General Health and Social Security System, the maximum period for the payment of obligations will be 60 calendar days, period which will be in effect from the beginning of the third year after the enactment of the law.
In the case of agreements governed by the general statute for public administration, contracts executed by and between government entities and micro, small or medium-sized companies, payments must be made within a maximum of 60 calendar days following the acceptance of the corresponding invoice.
3. THIS LAW SHALL NOT APPLY TO:
When the contracting party is in default due to the expiration of the fair payment period, the creditor has the right to claim from the debtor, compensation for all duly documented collection costs incurred by the contractor/creditor due to the contractor’s default.
1. Purpose
To establish the duty for merchants or non-merchants which undertake mercantile acts, to pay their obligations within a period of maximum 60 calendar days, within the first year as of the enactment of the law, and a maximum of 45 calendar days, for subsequent years thereafter. Such periods will be calculated from the date of reception of the goods or the date in which the respective services were rendered.
2. Scope
In the case of commercial operations carried out within the framework of the General Health and Social Security System, the maximum period for the payment of obligations will be 60 calendar days, period which will be in effect from the beginning of the third year after the enactment of the law.
In the case of agreements governed by the general statute for public administration, contracts executed by and between government entities and micro, small or medium-sized companies, payments must be made within a maximum of 60 calendar days following the acceptance of the corresponding invoice.
3. THIS LAW SHALL NOT APPLY TO:
- Commercial operations between entities considered as large companies. In any case, Law 2024 establishes that, notwithstanding payment agreements between large companies, the inclusion of clauses that (a) disregard the 45 and 60 calendar day period; (b) disregard the payment of default interest; or (c) limit the debtor’s liability, will be automatically rendered null and void, that is, they will have no legal effect.
- Payments made under commercial transactions in which consumers are involved and that are subject to consumer protection rules.
- Interest in checks, promissory notes, and bills of exchange and indemnification payments for damages, including payments from insurance companies, credit or loan agreements, and any type of contract where deferred terms for payment are in the essence of the contract.
- Debts subject to insolvency or reorganization proceedings.
- If there is a procedure for the acceptance of the goods or services, such procedure must be carried out within the period for payment established in Law 2024:
- In the event that the contracting party requests the contractor to make a correction or rectification, such request will interrupt the term for fair payment and such term will resume on the following day after the contractor makes the adjustment or rectification.
- In case the contractor requires any correction or rectification of the physical or electronic invoice and/or its supporting documents, such a request will interrupt the term for fair payment, which will resume on the following day after the contractor makes the respective adjustments.
- It will be the responsibility of the contracting party to issue in a timely manner, within the period for fair payment, the documents of any nature that are prerequisites for the filing of the invoices. Under no circumstance, will the period for fair payment be extended due to the delay of the contracting party.
- The reception of the invoice by electronic means shall have the effect of beginning the term for the payment.
- Delays attributable to the creditor/contractor shall interrupt the period for fair payment.
When the contracting party is in default due to the expiration of the fair payment period, the creditor has the right to claim from the debtor, compensation for all duly documented collection costs incurred by the contractor/creditor due to the contractor’s default.
- The contracting party may only be exempted by demonstrating force majeure.
- The erroneous or undue application by the contracting party of the calculation of withholdings of any nature, which results in a higher value withheld, will be understood as a violation of the fair payment term, thus, a compensation obligation in favor of the contractor will arise thereof.
- The law will come into effect on January 1, 2021.
- The provisions set out in the Law may not be changed through mutual agreement of the parties and any contractual provision which changes or contradicts the latter shall be null and void.
- The National Government will prepare and publish on an annual basis, a list of the companies and the times in which they make their payments and will grant a recognition (creation of seals) for those that are in the first places.
- Three years after the enactment of Law 2024, the Government will evaluate its impact on competitiveness and productivity in the private sector.
To download the newsletter, clic here: